Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Ivanhoe Mines’ (TSX: IVN) co-chairmen Robert Friedland and Yufeng “Miles” Sun issued a communiqué this week stating that recent increases in the price of palladium, nickel, rhodium and gold have resulted in the weighted price of the ‘basket’ of metals contained in the ore at the company’s Platreef project to rise to a new, multi-year high.
“While many investors are focused on gold, palladium has been far and away the best performing precious metal for the past several years,” Friedland wrote in the press brief. “The strong, upward price appreciation since 2016 of the collective basket of metals to be produced by Platreef when commercial operations commence at the Tier One discovery is encouraging.”
At current prices, palladium and nickel comprise more than 60% of the weighted price of the ‘basket’ of metals in Platreef’s ore
Located near Mokopane in South Africa, Platreef is a massive, high-grade, long-life deposit.
According to Friedland, the mine is expected to produce a suite of vital metals. “The nickel and copper by-products are essential in the electric car revolution, and platinum and palladium are equally vital for hydrogen fuel cell technology and catalytic converters to clean the air,” he wrote.
Based on independent analysis prepared in the 2017 definitive feasibility study, Platreef is projected to have a cash cost of $351 per ounce of 3PE+Au, net of nickel and copper by-products, and including sustaining capital costs. The DFS estimated that the project’s initial, average annual production rate will be approximately 219,000 ounces of palladium, 214,000 ounces of platinum, 30,000 ounces of gold and 14,000 ounces of rhodium, plus 21 million pounds of nickel and 13 million pounds of copper
